Cattle bounces off support amid short covering rally

Financials: Mar. Bonds are currently 4 higher at 143’19 and the 10 Yr. Note 1 lower at 131’17. If you remain long either take profits or raise your protective sell stop from the 142’16 level to 143’06. Near-term resistance remains at 144’16.

Grains: Mar. Corn is currently 6’0 cents higher at 700’0, Mar. Beans 7’4 higher at 1425’4, Mar. Wheat 7’4 higher at 739’4 and Dec. Wheat 5’6 higher at 772’6. I will be a buyer in Mar. Corn between 680’0-685’0 if the market allows. We remain long out-of-the-money call spreads in Dec. Wheat.

Cattle: Apr. LC are currently unchanged at 129.75 and Mar. FC 10 higher at 142.77. Yesterday Apr. LC came close to testing support in the 127.00 area posting a low of 127.60 before the market experienced a 225 point short covering rally. Mar. FC had a similar storing falling nearly 200 points before rallying more than 300 points closing 130 higher. I am not willing to call the bottom of these markets, but I do feel they are now tradable on sharp breaks and rallies from either side of the market.

Silver: Mar. Silver is currently $0.35 lower at $30.00 and Apr. Gold is $20.00 lower at $1,615.50. Gold has traded below the $1,629.00 support level. The next major level of support is now the 1580.00 level. Use caution (close stops) if you are inclined to try and pick a bottom on this market. We will continue to hold a small long position in Silver.

S&Ps: Mar. S&Ps are currently 2.00 lower at 1516.50. We continue to hold a combination of short futures and short out-of-the-money puts. Near term support is currently 1508.00 and near term resistance 1522.00.

Currencies: As of this writing the Mar. Euro is currently 20 lower at 1.3330, the Swiss 3 lower at 1.0837, the Yen 43 lower at 1.0710 and the Pound 15 higher at 1.5497. We went short the Euro on yesterday’s close below the 1.3370 level. Either take the short term profit or use a protective buy stop in the 1.3490 area. If the market trades below the 1.3310 level, lower your stop to 1.3410.

About the Author

Mr. Nemenoff is a 40-year veteran of the futures industry. While attending graduate school at the Illinois Institute of Technology, Marc took a job as a clerk on the trading floor of the Chicago Mercantile Exchange. Over the years he grew to become an independent member of the exchange and spent many years as a trader, market maker, lecturer, and committee member. Since 2004 Marc has been a senior broker and analyst handling customer accounts for both speculators and hedgers in addition to institutional traders. Marc is also the author of The Nemenoff Report, a daily overview of the markets that includes his own perspective on market direction. Mr. Nemenoff describes his approach to the market as 75% technical and 25% fundamental and is also a firm believer in the use of option strategies as a way of using leverage and minimizing risk when one has a long-term market strategy. You can contact Marc by phone at (888) 908-4310 or by email at mnemenoff@pricegroup.com. Learn even more on our website at www.pricegroup.com.

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